Discussion on labour - market discrimination.
1) Suppose the ABC Corporation adopts a policy prohibiting its top-level executives, whose compensation packages include awards of ABC stock each year, from selling such stock until two years after they leave ABC) Use economic theory to analyze the incentive effects of this prohibition.
2) An economic study has found which men who are judged to be "ugly" have earnings which are 9% less than their "average-looking" peers with the same age, education, and occupation; those who are considered "handsome" make 5% more than average. Is this evidence of labour-market discrimination? Discuss fully.